We all have the right to live long and healthy lives, without breaking the bank. Unfortunately, our current health care system is overly complicated for everyone. We need more transparency.
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Our NewsletterIssue No. 29 - Narrowing the Gap Between U.S. and Foreign Drug Costs
Americans spend more on drugs than people who live in other rich countries. In his State of the Union Address in January, President Trump described the disparity as “very, very unfair.” The extent of the difference, however, is a complicated matter. A CNN report in 2015 said that “Americans pay anywhere from two to six times more than the rest of the world for brand-name prescription drugs.” A study reported by Scientific American says that U.S. prices are triple those of the United Kingdom. But such comparisons pit U.S. list prices against final negotiated prices in Europe: apples vs. oranges. A more accurate comparison would take into account U.S. discounts and rebates and use actual average selling prices for U.S. medicines. A study published March 13 in JAMA by Irene Papanicolas, Liana Woskie, and Ashish Jha of the Harvard Chan School of Public Health looked broadly at health-care costs in the U.S. and other high-income countries. It found that U.S. prescription-drug spending and total pharmaceutical spending (including drugs administered in doctors’ offices and hospitals) were each nearly double that of the average of the 11 countries (seven from Europe plus the U.S., Canada, Australia and Japan) studied. The paper did not state whether the U.S. data included discounts and rebates, but the dollar figures are much higher than those in a September study by the Quintiles IMS Institute, which removed discounts and rebates and calculated “net manufacturer revenue” for all drugs (including those administered in doctors’ offices and hospitals). Some drugs are actually cheaper at home than abroad. In 2004, a report from the FDA began, “If you think all drugs from Canada are cheaper than U.S. drugs, think again.” Generics now account for 89% of all U.S. prescriptions, and the FDA looked at the seven top-selling generics in the U.S. in 2004: “For six of the seven drugs, the U.S. generics were priced lower than the brand-name versions in Canada. Five of the seven U.S. generic drugs were also cheaper than the Canadian generics.” More recently, Canada’s Globe and Mail reported in 2014 that a study by the University of Ottawa and the Bruyere Research Institute found that Canadians are “spending much more than people in the…United States” for six drugs studied, including popular medications for cholesterol and high blood pressure. Read more here |
What Others Are Saying"The anger directed at the pharmaceutical and biotech industries overall is misdirected. The single biggest driving force for increased health-care spending in the U.S. is the rising cost of labor, not drugs." "Even if pharmaceutical spending were rising as a share of total health care spending, but that rise was due to pharmaceutical investments driving down expenditures in other health care areas (e.g. a reduced need for more expensive surgeries), then it would still be inaccurate to argue that pharmaceutical spending is driving overall health care inflation." Newsletter Archive
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